A $300 million sale backed by hospital third-party payments is planned for this fall.

But its position has improved, partly as a result of Federal constraints on hospital payments.

He designed a proposal to eliminate the surtax but retain the ceiling on hospital payments, which would be financed entirely by the monthly fee.

The company is normally a strong lobbyist against increased hospital payments.

He also brought up the payment-clearing industries for credit card charges and hospital payments, which each have only two or three major players.

In doing so he provided the basis for changing the system for hospital payment.

The two more recent surcharges being challenged include an 11 percent surcharge for one year on hospital payments by commercial insurers.

Mr. Taylor predicts that pressures from the new drug benefit will force a rethinking of hospital payments under Medicare.

The growth of hospital payments, by contrast, was curtailed by a 1983 law.

Mr. Spitzer has proposed cutting $1.2 billion a year in health care costs, including more than $350 million in hospital payments.